THE AUSTRALIAN COMPANIES IN THE PASMINCO GROUP APPOINTS ADMINISTRATORS

Restructure Process Underway


The Directors of Pasminco yesterday appointed Mr John Spark and Mr Peter McCluskey of the Turnaround Management firm, Ferrier Hodgson, Administrators of the Australian companies in the Pasminco Group ("the Group"). The overseas subsidiaries are not subject to the Voluntary Administration.

The purpose of the Voluntary Administration was to assist with the restructure process of the Group and obtain further funding for a restructure.

Mr Spark said that in terms of the ongoing trading of the business, it will be very much business as usual. The Group will continue with its mining and smelting activities in Australia, the Netherlands and the United States and the sale of metals worldwide.

"There are sufficient assets to meet all existing employee entitlements. We can assure the employees that all of their entitlements are secure and will be honoured as the business goes forward," he said.

"The book value of assets after the writedowns for 2001 still remain at $3.3 billion".

"There is a sale process in place for the Century and Broken Hill mines and it is intended this sale process will continue.

"It is important to note that since our appointment we have secured an additional $300 million in funding from the company`s major creditor banks.

"Accordingly, there will be no fire sale of assets and we now have the flexibility to work to restructure the business to deliver value to all stakeholders.

"The Voluntary Administration will provide breathing space to the Group whilst a full and thorough assessment of its financial position is undertaken and a plan put together which offers the best prospects for the future of the Group`s businesses.

"Our main focus is to restructure the business. This may include the going concern sale of some of the individual assets.

During the course of the Voluntary Administration our objectives will be:

• 
  
• To keep the business operating as usual during the review period.
  
• To formulate a plan for the restructure of the business.
  
• To sell elements of the businesses where appropriate.
  

The broad process following the appointment of an Administrator is as follows:

• 
  
• Within five days of the appointment a meeting of creditors is held to elect a Creditors Committee and confirm the appointment of the Administrators.
  
• The Administrators immediately commence work on a review and a possible restructure of the company which provides for a viable business into the future.
  
• A second meeting of creditors is held to put a proposal to creditors for their consideration. It is presently envisaged that this will take place in three to four months.
  

Mr Spark went on to say that in relation to the potential sales of assets, the sale process for Broken Hill Mine and Century Mine will continue, however these assets will not be sold unless the price is within the Administrators` expectations.

"In the meantime, we as Administrators, in conjunction with the senior management of the Group, will be reviewing each operation and preparing a strategy that provides the best outcome for stakeholders." Mr Spark said.

Mr Spark said the company`s debt currently stands at approximately $2.9 billion as follows:

For further enquiries, you should contact Peter Mahon - Royce 03 9639 2300 or 0418 351 754

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